Karl Oyston's annulment order has reversed the effect of his bankruptcy, say Blackpool Football club. Photograph: John Sibley/Action Images

Blackpool have confirmed that the bankruptcy order made against the former chairman, Karl Oyston, has been annulled.

Oyston stepped down as the chairman and a director at Bloomfield Road on 18 August, a day before it emerged he was involved in a bankruptcy hearing. He was later declared bankrupt and an insolvency report published in September confirmed his status had been such since 18 August.

No reason was given for Oyston's sudden resignation at the time but Premier League rules forbid any person who has been declared bankrupt from serving as a club chairman or director.

Oyston, son of the majority shareholder Owen, has continued since as acting chief executive and has pledged to do so until a replacement is found.

"Blackpool Football Club can confirm that, with effect from 4pm on Tuesday 12 October 2010, the bankruptcy order dated 18 August 2010 made against the former chairman of the club, Karl Oyston, has been annulled," the club said today.

"The annulment order reverses the effect of the bankruptcy order as if it had never been made. The club will be making no further comment at this stage."

Oyston has been praised in some quarters for refusing to break a £10,000‑a‑week player wage ceiling since Blackpool's surprise promotion to the top flight last season. He has, however, voiced disillusionment with the business side of life at the top level, which includes dealing with player agents.

The Premier League, which had asked the club for clarification of Oyston's role as acting chief executive, confirmed it was aware of the latest development.

"The Premier League has received notification of Karl Oyston's annulment. The Premier League Board will now consider the matter at its earliest convenience."